In this year’s Budget, only his second as Chancellor, Rishi Sunak announced a range of small business friendly measures to help the sector recover from the impact of 12 months of trading under coronavirus restrictions.
Top amongst the Chancellor’s announcements were an extension of the government’s existing furlough scheme to September and the continuation of a reduced 5% VAT rate for hospitality businesses, also until September, with a lower interim rate of 12.5% for a further six months until April next year. These were both measures called for by business owners when we at Recognise conducted our own survey of SMEs last month.
These announcements are great news for firms that have already weathered a tough 12 months under COVID-19 restrictions. One in four small businesses told Recognise they wanted the Chancellor to extend the furlough scheme in the Budget, while nearly half of hospitality firms said they wanted the reduced 5% VAT rate to continue.
Britain’s growing businesses are a tough and confident bunch and are looking forward to things opening up in the spring and getting back to business. But many have been hit hard by restrictions and lockdown, with almost half of all small hospitality companies telling us they wanted the furlough scheme to continue beyond the spring.
This news will help them over the final few months until they can start trading fully again and help the UK economy back on the road to recovery.
In what was a packed Budget, Mr Sunak also announced the setting up of a new Recovery Loan Scheme and changes to Corporation Tax, including the new small profits tax rate which recognises the vital role that small businesses play in the UK economy, comprising 52% of the UK’s total GDP*.
It is great news that their unique place in the UK economy has been recognised in this Budget. This feels like the beginning of a more encouraging period for the country’s growing businesses.
*Source: FSB UK Small Business Statistics
